Swansea MP Garry Edwards has become the latest in a growing line of NSW Liberals to stand aside after shock revelations of corruption at the Independent Commission Against Corruption.

Mr Edwards made the announcement on Thursday afternoon after property developer and Newcastle mayor Jeff McCloy told the corruption inquiry he gave tens of thousands of dollars in secret donations to Liberal candidates and felt "like a walking ATM sometimes".

Property developers have been banned from making political donations in NSW since 2009.

The independent mayor of Newcastle admitted he gave cash to Mr Edwards, who has not previously been named as part of the ICAC's inquiry, along with envelopes containing $10,000 in cash each to the now former Liberal MPs Tim Owen and Andrew Cornwell.

Asked why he handed over wads of cash in his luxury Bentley rather than declaring the donations, Mr McCloy said: "I wished to remain anonymous ... and that little game plan hasn't worked out too well, has it?"

In another surprise development, Mr McCloy said he might have given money to Liberal MP Robyn Parker's husband for CDs.

Ms Parker is expected to give evidence on Friday but has not been accused of wrongdoing.

Mr Edwards adds to a lengthening list of Liberal MPs who have been named during ICAC proceedings.

On Wednesday, former police minister Mike Gallacher was implicated in a scheme to take illegal donations from Nathan Tinkler's property development group.

Port Stephens MP Craig Baumann was named as having "facilitated" an illegal payment by Nathan Tinkler's property development group Buildev to Mr Owen's campaign.

Other lower-house Liberal MPs to be named at the inquiry - and who now sit with Mr Edwards and Mr Gallacher on the crossbench - include Chris Hartcher from Terrigal, Chris Spence from the Entrance and Darren Webber from Wyong.

The federal Liberal Party has also been drawn into the inquiry, with assistant federal treasurer Arthur Sinodinos standing aside as assistant federal treasurer until ICAC finishes its investigations into Australian Water Holdings, a company he chaired.